Tag: S&P

German politician: Euro downgrade is an American plot

Standard & Poor’s warning that no less than fifteen eurozone states, including Germany, could lose their AAA credit rating has been met with howls of protest from leading German politicians. The general secretary of the Social Democratic party (SPD), Andrea Nahles, described the Standard and Poor’s announcement as “shameless.” Former German finance minister Peer Steinbrück, also of the SPD, spoke of a “provocation” and urged the European Commission to subject the rating agencies to “far stricter regulation.”

The current German economics minister, Philipp Rösler of the ostensibly pro-free market Free Democratic Party (FDP), employed somewhat more measured tones, stiffly commenting, “Germany will not let itself to be impressed by the day-to-day and very short-lived judgment of a single ratings agency.”

15 EU Nations put on a negative credit watch

Standard & Poor’s on Monday warned it may carry out an unprecedented mass downgrade on the credit ratings of euro zone countries if EU leaders fail to reach an agreement on how to solve the region’s debt crisis in a summit later this week.

S&P placed the ratings of 15 euro zone countries on credit watch negative — including those of top-rated Germany and France, the region’s two biggest economies — and said “systemic stresses” are building up as credit conditions tighten in the 17-nation region.

While a credit watch negative typically signals a possible downgrade in no more than three months, S&P said it expects to conclude its review “as soon as possible” following a crucial summit of EU leaders on Friday.

Investors hope to see a comprehensive crisis response from policy makers, including the European Central Bank , at the EU summit.

Greenspan warns of Italy and a negative market reaction

By Newsmax Wires Former Federal Reserve Chairman Alan Greenspan says he expects the stock market slide to continue in the wake of a decision by credit rating agency Standard & Poor’s to downgrade the U.S. credit rating, even as an S&P official predicted little market impact.

Appearing Sunday on NBC’s “Meet the Press,” Greenspan said markets will take time to bottom out and that he expects a negative reaction on Monday to the S&P action. He cited a tumble in the Israeli stock market.

Another U.S. recession “depends on Europe, not the U.S. We were doing fine until Italy ran into trouble,” he said. “That destabilized the European system, and the crisis re-emerged. Europe is very critical to the United States in the sense not only do we have a fourth of our experts there, but more importantly, significant proportion of the foreign affiliate profits, in fact half of U.S. corporations, are in Europe.”

Greenspan answer to default is to print more money

Former Federal Reserve Chairman Alan Greenspan on Sunday ruled out the chance of a US default following S&P’s decision to downgrade America’s credit rating.

“The United States can pay any debt it has because we can always print money to do that. So there is zero probability of default” said Greenspan on NBC’s Meet the Press

“What I think the S&P thing did was to hit a nerve that there’s something basically bad going on, and it’s hit the self-esteem of the United States, the psyche” said Greenspan

Austan Goolsbee, the chairman of the White House’s council of economic advisors, hit out at S&P on the same show, insisting the credit ratings agency had got its math wrong.

Economic crisis is coming

“We Will Have Another Crisis” headlines Money magazine in a feature article for its June edition just hitting newsstands.

Money quotes Robert Rodriguez, a highly-regarded mutual fund manager and CEO of FPA New Income Fund, as saying the U.S. economy, crippled with a mushrooming federal debt, will soon be slammed with another economic crisis — despite the federal government’s bailout and attempts at fiscal reform.

During the past decade, Rodriguez’s fund posted 9 percent per annum returns, far outpacing the S&P 500 index.

Robert Rodriguez “I would say a lot of nothing has changed,” Rodriguez said, after Money asked him if his negative assessment had changed.

The Hindenburg Omen,is it soon?

Wall Street is whispering about the “Hindenburg Omen.” It’s an ominously named technical indicator that is supposed to signal an upcoming stock market crash. “Its creator, a blind mathematician named Jim Miekka, said his indicator is now predicting a market meltdown in September,” reports The Wall Street Journal.

The S&P 500 completed on Friday the biggest three-day decline since July 1. The wobbly stock market has investors worried and searching for clues on the market’s direction.

Doom or Drinking?

Some traders are warning clients about the indicator, and some blogs are all doom and gloom. The indicator may suggest “a savage equity downturn is imminent,” Bloomberg quotes Albert Edwards, a London-based strategist at Societe Generale SA, as saying.